US Fed's Unexpected Hawkish Remarks; LME Zinc Records Three Consecutive Declines [SMM Zinc Morning Comment]

Overnight, the US Fed cut interest rates by 25 basis points as expected, with the number of rate cuts for next year halved; the US Q3 current account recorded the largest deficit on record; Hamas announced significant progress in negotiations for a Gaza ceasefire agreement; the EU is drafting its 16th round of sanctions against Russia; the Central Rural Work Conference proposed orderly advancing pilot programs to extend the second round of land contracts for another 30 years after expiration; two departments announced optimized pilot policies for integrated domestic and foreign currency cash pool business in 10 provinces and cities for multinational companies; Hong Kong established a task force to promote the development of the gold market; Shenzhen introduced a "new measure" to support artificial intelligence by issuing up to 500 million yuan annually in "training capacity vouchers."

Overnight, LME zinc opened at $3,033/mt. After briefly consolidating around the daily moving average at the beginning of the session, LME zinc plunged as bulls exited, with its center moving below the daily moving average and hitting a low of $2,988/mt during European trading hours. Subsequently, the center fluctuated around $3,005/mt, eventually closing down at $3,001/mt, a decrease of $35.5/mt or 1.17%. Trading volume decreased to 8,619 lots, and open interest fell by 4,398 lots to 230,000 lots. Overnight, LME zinc recorded a three-day losing streak, with resistance formed by various moving averages above. LME inventory decreased by 1,700 mt to 260,400 mt, a drop of 0.65%, continuing its downward trend. The US dollar remained strong, and the US Fed unexpectedly issued hawkish rate cut remarks, causing LME zinc's center to shift downward.

Overnight, the most-traded SHFE zinc 2502 contract opened at 25,050 yuan/mt. After quickly reaching a high of 25,085 yuan/mt at the beginning of the session, its center moved below the daily moving average, running relatively steadily overall, with a low of 24,970 yuan/mt during the session. It eventually closed down at 25,000 yuan/mt, a decrease of 155 yuan/mt or 0.62%. Trading volume decreased to 37,986 lots, while open interest increased by 961 lots to 124,000 lots. Overnight, SHFE zinc recorded a four-day losing streak, with support provided by the 40-day moving average below. SHFE zinc fluctuated downward overnight as supply-side support weakened. Overall open interest decreased, and capital favorability declined, but the spot market remained tight, limiting its downside to some extent.